Credit Tenant Lease Loans
Credit Tenant Lease Loans (“CTL Loans”) are the foundational loan product of CTL Capital. Unlike traditional commercial real estate financing focused only on the physical collateral and credit of the borrower, Credit Tenant Lease financing leverages the credit-worthiness of the tenant and the structure and payment schedule of the lease to collateralize the loan.
CTL Loans are typically utilized for single-tenant properties but can be applied to any lease with an investment grade tenant or private equivalent.
Some sample terms of a typical Credit Tenant Loan includes:
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Name
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Description
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Loan Amount
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$5-10mm minimum, $500mm+ for appropriate transaction
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Term
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Coterminous with lease term
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Amortization
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Self-Amortizing or extended amortization available via residual options (RVI, A2, B Notes)
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LTV
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Up to 100% LTV, subject to DCF
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DSCR
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As low as 1.0x for Bond type/NNN, 1.05+ for NN and modified gross
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Interest Rate
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Fixed Rate, determined by capital market bond pricing of underlying Tenant’s credit plus liquidity premium
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Prepayment
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Yield Maintenance at any time
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Security
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First-lien mortgage
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Borrowing Entity
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Special Purpose Entity
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Recourse
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Non-recourse with the exception of industry standard carve outs
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Third Party Reports
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Current appraisal and current Phase I, standard construction reports and completion guarantees for construction financings
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Assignment
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Loan is assumable
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Reserves
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Typically minimal, but subject to lease / landlord expense exposure
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